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'Health IT' Debate: Can It Cut Costs?

Policy Makers Wrestle With the Logistics of Electronic Medical Records and E-Prescribing
WebMD Health News
Reviewed by Louise Chang, MD

June 20, 2008 -- You don't have to go far to find a politician cheerleading for the magical cost-cutting abilities of health information technology.

Democratic and Republican policy makers point to "health IT" like electronic medical records and e-prescribing systems as a big potential money saver for America's inefficient and expensive health system.

But in the glare of computer touch screens and smart cards, it's easy to lose sight of what health IT can do -- and more importantly can't do -- for the faltering U.S. medical system.

The 'Buttered Toast' Analogy

Now one of Washington's most important voices on health care costs is trying to get Congress and the candidates to see health IT in more realistic terms.

To Peter Orszag, director of the Congressional Budget Office (CBO), plugging U.S. health care into computerized IT systems is a lot like plugging in a toaster. It's just one step to having toast for breakfast. And if you think of an efficient, cost-effective, and convenient health care system as having your toast buttered, it's not even close.

"If you just plug the toaster into the wall, the toast is not going to be buttered, especially if you haven't even bought the bread," Orszag told a Capitol Hill forum on health IT on Friday.

Orszag says the point of his toast analogy is this: U.S. health care is riddled with inefficiencies. A recent CBO analysis shows there's $700 billion in potential waste. A lot of it comes from doctors and hospitals using treatments, tests, and procedures without any clear evidence telling them which ones work best, or cheapest.

So even if American hospitals and doctors get "plugged in," they still won't have taken several other steps Orszag and other economists say the country will have to take to get health costs under control. That includes more studies to find out what really works, and then using the clout of government programs like Medicare to only pay for the most efficient care.

"If you just plunk in health IT systems down in the middle of a fragmented system ... you're not going to get very much," Orszag says.

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